Q&A: U.S. Postal Service

Jan. 18, 2013

About 155 postal workers could lose their jobs next year if the U.S. Postal Service decides to close a mail processing facility in the village of Rothschild, pictured, Thursday, September 15, 2011. Dan Young/Wausau Daily Herald / Gannett Wisconsin Media file photo

Written by

Gannett Wisconsin Media Investigative Team

Why aren’t United States Postal Service employees included in the “What We Pay” salary lists?

This Gannett Wisconsin Media reporting series is named “What We Pay: Your tax dollars and the salaries they support.”

In the case of USPS, taxes aren’t used to pay salaries.

While it’s true that USPS is a quasi-governmental agency, created by Congress and overseen by government appointees, there is no direct connection from tax dollars to USPS employee salaries, which are based on sales of services and products.

USPS has used taxpayer money in recent years as operating deficits forced it to borrow $15 billion from the U.S. Treasury.

How was USPS formed?

USPS, under various names, has operated since 1775, when Benjamin Franklin was appointed as the first postmaster general by the Continental Congress. It was converted from a federal department to an independent federal agency in 1970, when it took on the U.S. Postal Service name and implemented operational changes, including collective bargaining for employees and removing direct oversight by Congress.

Who oversees USPS?

Since 1970, USPS has been run by a nine-member Board of Governors, each of whom is appointed by the president and approved by the U.S. Senate. The board members serve seven-year terms, and no more than five can be from the same political party.

How many employees does USPS have?

USPS had 528,458 “career” employees nationwide as of September 2012. That group is 10 percent of the world’s postal employees but delivers about 40 percent of the world’s mail. In the 2012 fiscal year, the USPS processed 159.9 billion pieces of mail.

Who changes the postal rate?

Postal rate changes are capped at the rate of inflation. After USPS determines a price change should occur, the independent five-member Postal Regulatory Commission (members of which are also appointed by the president and approved by the Senate) reviews the change to ensure it complies with the law.

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How is USPS funded?

The service is paid for through sale of postage and mail products and services. USPS became an independent federal agency in 1970 and has taken essentially no direct taxpayer subsidies since 1982. The only exceptions are a few million dollars annually to deliver reading material to the blind and mail to veterans overseas, which are mandates imposed by Congress and paid for with public money.

Is USPS losing money?

USPS has operated at a loss since 2007. During that span, it generated revenue of $558 billion and accumulated debt of $15 billion — money borrowed from the U.S. Treasury’s Federal Financing Bank.

The USPS is required to repay the debt to the Treasury, and is now at its borrowing limit. In the fiscal year ending in October 2012, USPS reported a record $15.9 billion loss, $11.1 billion of which was to be payments to pre-fund retiree health benefits.

The National Association of Letter Carriers, the largest USPS union, says 80 percent of losses and all borrowing is due to a 2006 congressional mandate that USPS pre-fund future retiree health benefits 75 years into the future. No other federal agency has such a requirement.